5 Questions to ask when hiring an investment fund lawyer

Need to hire an investment fund lawyer but not sure what to ask? Let us help.

Australia, despite its small population, has the largest funds management industry in Asia – Pacific and the sixth largest in the world. The growth of the industry is fueled by Australia’s sophisticated investor base, a world-class regulatory environment and a mandatory retirement income (superannuation) system . When considering hiring an investment fund lawyer legal expertise to help form your fund, you should try to make sure you understand exactly what you need from your lawyer. This guide provides five questions to ask an Investment Fund lawyer, useful when searching Law Path’s Lawyer Directory.

1. What type of structure should we choose?

In Australia, you have a variety of options on how to run your investment fund as there is no uniform structure. The type of structure you choose has important implications on your compliance requirements and the taxation treatment of your investors. An investment fund lawyer can guide you through the best options for your fund while considering factors like the size of the fund, the investment strategy, the sector, industry and stage of development of the target portfolio entities.

2. Should we consider retail or wholesale investors?

This may seem like an obvious question, but your answer will mean you have different compliance requirements. For example, retail investors enjoy access to all the consumer protections, such as access to external dispute resolution, whereas wholesale investors do not. If you are planning to have both retail and wholesale investors in your fund you will need to enact strict compliance requirements to ensure that your customers are given the right information every time. You should ensure your lawyer is familiar with the appropriate tests for retail and wholesale investors and request their assistance to ensure you meet the compliance requirements set by ASIC.

3. What is the best approach to withdrawal options?

By now you likely have a business plan which details your fee and commission structure. However, to save you time on your Australian Financial Services Licensing application, you should seek legal advice about what the best withdrawal options are for your business. Unlisted managed funds can impose withdrawal rights, but ASIC does have limits on the timeframes you can offer. You should seek clarification on what timeframe is best for your business and your licensing requirements.

4. What is your experience?

When hiring a lawyer, you should always obtain legal representation from a specialist in the area and an investment fund lawyer is no exception to this rule. Great investment fund lawyers need to be able to grasp complicated and innovative investment concepts with solid legal and analytical skills. Furthermore, you want to seek legal advice from investment fund lawyers who have experience managing the different stakeholders and have prior interactions with local and/or international regulators.

5. What are your costs?

You need to make sure you understand the cost associated with hiring the lawyer. There are two common methods of payment that allow you to estimate your fees and whether it is worth proceeding.

Billable hours

Billable hours are when the lawyer charges for every hour spent on your issue. You should try and get an idea of how many hours the lawyers expect to take. Keep in mind that even a short five-minute conversation can add much more to your final bill.

Flat Fee

A flat fee can provide a better idea of what you’re paying. The flat fee, however, may not cover all legal costs, such as appearing in court.

Conclusion

When considering hiring an investment fund lawyer you need to consider a range of issues that will affect how you run your organisation. By seeking experienced legal advice, your legal representative will be able to assist you in this process and prepare your fund for the future.

Need specialised advice regarding your investment fund? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our lawyer marketplace or any other legal needs.